Exposé of Daniel Hannan’s “Ten reasons to leave the EU”

Tory MEP Daniel Hannan, writing in yesterday’s Telegraph, has laid out what he claims are “Ten reasons to leave the EU”. LFF examines them point-by-point.

Tory MEP Daniel Hannan, writing in yesterday’s Telegraph, has laid out what he claims are “Ten reasons to leave the EU”. Left Foot Forward rebuts each of Mr Hannan’s points:

1. Since we joined the EEC in 1973, we have been in surplus with every continent in the world except Europe. Over those 27 years, we have run a trade deficit with the other member states that averages out at £30 million per day.

Trade is a two-way operation and Britain’s trade with other EU countries has risen from about a third of our trade when we first joined to nearly 60 per cent now, despite the huge increase in the purchasing power of China, India, and oil producing countries in that time. The fastest growth rates of UK exports in recent years have been to the new EU Member States. 3½ million UK jobs are dependent on the export of goods and services to the EU.

If we were out of the EU, there would have even less likelihood of selling UK manufactured products to other EU countries, so the figures would be worse.

2. In 2010 our gross contribution to the EU budget will be £14 billion. To put this figure in context, all the reductions announced by George Osborne at the Conservative Party Conference would, collectively, save £7 billion a year across the whole of government spending.

Hannan is guilty of sleight of hand here by talking about “gross contribution”. Once the rebate is taken into account, our net contribution is £3.3bn in 2009-10 (see UK Budget 2009, Table 9C, footnote) – about £1 per week per person. Some of this finances things like infrastructure development in the poorer EU countries, which British firms regularly win tenders for.

The EU budget is just over 1 per cent of EU-wide Gross National Income, and 1/40th of public spending in total EU-wide. The Department for Work and Pensions, for example, has an annual budget of more than £100 billion – that’s about the same as the entire EU budget, just from one UK government department.

3. On the European Commission’s own figures, the annual costs of EU regulation outweigh the advantages of the single market by €600 to €180 billion.

Hannan takes no account of where common EU rules actually cut costs for businesses. By having one set of rules for the common market of 27 countries and 450 million people, EU legislation reduces costs for businesses. For example, a firm can register a trademark once, valid throughout the EU, without having to go through 27 different sets of national rules, form-filling and fee paying. A lorry taking British exports to Italy used to need over 20 documents to present at frontiers. Thanks to EU legislation this is now down to one.

Another example, the Payment Services Directive, guarantees fair and open access to payments markets and increases consumer protection. Currently each Member State has its own rules on payments, and the annual cost of making payments through these fragmented systems is as much as 2-3 per cent of GDP. Payment service providers are effectively blocked from competing and offering their services throughout the EU. Removal of these barriers is estimated to save the EU economy €28 billion per year overall.

Indeed, a European Commission study in 2002 showed that EU GDP is around 2 per cent higher than it would be without the Single Market, equivalent to a benefit of £20bn for the UK economy (or about £1,000 per family every year). The single market gives all UK businesses access to a market of 450 million consumers. Perhaps this explains why, in a recent Ipsos Mori poll which interviewed 102 executives from Britain’s largest businesses, 78 of them replied that the single market had been helpful to UK business.

Hannan also misses the point because he assumes that all regulation is bad. Of course, some regulation imposes costs, and these should be removed if there is no justification. But most regulations have clear benefits such as saving money in the future, protecting workers for harm or loss of life, and protecting the environment. Many would also have been implemented at national level if they did not exist at EU level (though at greater costs if divergent national rules fragmented the single market).

Europeans need and want social protection. Things like maternity and paternity leave, right to paid holiday, those sorts of things. Abolishing all rules of the single market implies a total erosion of workers’ rights – for example, the costs to cigarette companies by making them label their products as dangerous are outweighed by the benefits to public health and long-term savings for the health service. Nutritional labelling protects consumers with allergies and informs consumers about the food they eat. The list goes on.

4. The Common Agricultural Policy costs every family £1200 a year in higher food bills.

If Hannan thinks that the alternative to the CAP is that Britain (almost alone in the industrialised world) would no longer subsidise its farmers, he is living in a dreamland; only one thing would be worse than the CAP – it is 27 national agricultural policies, each trying to out-subsidise the other. It makes much more sense to reform CAP by remaining in the EU and reforming it from within.

It should also be noted that the cost of CAP has steadily declined as a proportion of the EU budget from over 70 per cent two decades ago to around 35 percent now. It has switched from market intervention to direct payments to farmers similar to the old UK system.

5. Outside the Common Fisheries Policy, Britain could reassert control over its waters out to 200 miles or the median line, which would take in around 65 per cent of North Sea stocks.

Because fish stay within British territorial waters and never leave?! How exactly do you stop fish swimming from one country’s waters to another? Like it or not, the only way to conserve fish stocks and save what is left of our fish is through joint agreement. The North Sea is already terribly over-fished, and common rules are vital to ensure sustainability of fisheries.

The EU, it is true, does need to reform its fisheries policy, making sure less fish are thrown dead overboard – but fish themselves do not respect borders, hence the need for supranational decision making. And, as with the CAP, the more isolationist, the more extreme the Tories’ position, the less likely they are to influence it.

6. Successive British governments have refused to say what proportion of domestic laws come from Brussels, but a thorough analysis by the German Federal Justice Ministry showed that 84 per cent of the legislation in that country came from the EU.

This is plainly nonsense, both the claim that the Government “have refused to say” the proportion of laws that come from Brussels, and the figure he quotes. The House of Commons Library states that only 9.1 per cent of UK laws stem from the EU.

7. Outside the EU, Britain would be free to negotiate much more liberal trade agreements with third countries than is possible under the Common External Tariff.

But Britain will be in a much weaker bargaining position vis-a-vis other countries than when we bargain with the whole clout of the worlds largest market behind us. And what of the tariffs that would be imposed on UK trade with the EU were we to leave? The UK is a country of 60 million people that is reliant on imports. The EU is a market of almost 500 million people, and can negotiate in the World Trade Organisation at a similar level to the USA, China, India etc. Leaving the EU would decrease the UK’s power to negotiate internationally, not increase it.

8. The countries with the highest GDP per capita in Europe are Norway and Switzerland. Both export more, proportionately, to the EU, than Britain does.

Both Norway and Switzerland have to accept EU market legislation with no say in shaping it. Both contribute to the EU budget (more per capita net contributions than the UK!). Both are small countries with very special features: massive oil reserves for Norway and a unique banking sector for Switzerland.

These countries are also – to all intents and purposes – in the EU single market. Norway, for example, implements all legislation for the single market (labour rights included) as it is in the European Economic Area (EEA).

9. Outside the EU, Britain could be a deregulated, competitive, offshore haven.

So, offshore banking is our future! Does Mr Hannan seriously, seriously, still believe that?! And in these times of financial crisis as well.

10. Oh, and we’d be a democracy again.

So what are we now? Is Hannan questioning his own democratic legitimacy? The EU is, far and away, the most democratic of all the international structures we belong to. It has its own directly elected Parliament, Charter of Rights and Court. Compare that to the IMF, World Bank, NATO, OECD, WTO etc. It should also be borne in mind that the Treaty of Lisbon, opposed by Hannan, for the first time gives countries the right to leave the EU and improves its democracy.

“Britain’s trade with other EU countries has risen from about a third of our trade when we first joined to nearly 60 per cent now, despite the huge increase in the purchasing power of China, India, and oil producing countries in that time. ”

Hang about, surely that’s a bad thing?

It means we’ve failed (whether because of EU membership or some other reason) to benefit from the far greater opportunities available in selling our goods and services to the fast-growing economies of China, India, etc, and are instead limited (for whatever reason) to focusing on trade with economies which are likely to be in structural decline over the next century.

Liz McShane

There are loads more reasons to stay within the EU and to be even more active & enthusiastic members rather than the traditional British way of whingeing from the sidelines – half in – half out.

What about having a peaceful post war Europe…… movement of travel & labour, progressive social policy (which we would never have had under Thatcher…). I think that John Hume is a great example and exponent as well as an eloquent communicator of what the benefits of Europe/The EU means for us.

Daniel Hannan apart from being opportunistic (in terms of courting the media) is a one trick pony and doesn’t really deserve the attention that we give him.

http://twitter.com/davygeee/status/6944280262 David Garrahy

RT @wdjstraw: Brilliant work by @shamikdas for @leftfootfwd: Exposé of Daniel Hannan’s “Ten reasons to leave the EU”: http://is.gd/5xq3O

Mary Fallon

These ripostes should be printed by each one of us, learnt by heart and used to trounce the feeble cliches used by the Tories as also by the paranoid ‘old men’, little englanders that are U-kippers and even more the nationalistic psychos, the BNP. Wonder if the Mail would dare to publish these facts………….not a chance in hell.

http://www.thinkpolitics.co.uk/blog The Parallax Brief

The problem with the EU is its anti-democratic nature. It is utterly unaccountable. Frankly, the Parallax Brief would be happy to see Britain as part of a federal Europe, with the Palace of Westminster acting as something like an American state legislature and Number 10 a governor’s residence. Britain would be stronger as part of a larger whole.

However, it must be democratic and accountable, and in its current incarnation it is not.

It says something for the way the EU worse when someone who would be willing to cede to it sovereignty has come to loathe it as an institution enough to have sympathy with a bunch of hysterical little-Englanders.

http://twitter.com/jackmacinnes/status/6955283466 Jack MacInnes

Brilliant work by @shamikdas for @leftfootfwd: Exposé of Daniel Hannan’s “Ten reasons to leave the EU”: http://is.gd/5xq3O (via @wdjstraw)

Matthew

Good stuff, although on trade (1) you didn’t need to go into all that detail. It’s much simpler – the point of trade is imports, the cost exports. That we have consumed £130m of goods and services a day from our European neighbours more than we have had to supply them is of great benefit. Some people might have some caveats to this argument, but not – unless I misunderstand his political philosophy- Daniel Hannan.

Mark

Each party has people wanting to pull out of the EU. Labour included, indeed there are several Labour MPs who have argued Britain should not be in the EU as well. Once again we have evidence that LFF keeps reacting to the Tories: it’s amusing but it’s biased, no?

http://www.johnband.org/blog john b

However, it must be democratic and accountable

All laws are passed by an elected parliament. All commissioners are nominated by elected national governments and confirmed by the elected parliament, which also has the right to fire the commission at any time. The Council of Ministers is nominated by elected national governments. All new treaties are approved unanimously by elected national governments.

If you think the EU isn’t democratic, it’s because you’ve fallen for the Hannanites’ stupid lies.

http://www.thinkpolitics.co.uk/blog The Parallax Brief

John B, the key is not De Jurre democracy, but accountability. MEPs are elected on a tiny portion of the electorate; there is an utter lack of accountability.

@ The Parallax Brief: a small turn-out at an election means just that, it doesn’t negate the result. EMPs are democratically elected.

Small turn-outs should, though, raise questions; eg whY? The EU (contrary to many people’s perception – perhaps Mr Hannan’s?) the EU does not impinge directly on the everyday world of the average elector. Any legislation agreed by EU leaders then has to be passed into law by the (democratically-elected?) parliaments of each member nation: so it becomes national legislation. Most ordinary electors feel most strongly about taxation, about health & welfare services, policing, etc. None of which is within the agreed powers of the EU.

For the EU (and EU elections) to become more relevant to the ordinary citizen, national governments, EMPs and the EU need to be more open about – why the EU, what it does, what it costs, etc.

Pieter

Open Europe shows that while the EU accounts for around 50 percent of the number of UK regulations, the EU share of the cost of those regulations is far higher. Of the cumulative cost of regulation, 106.6 billion pounds, or just under 72 percent had its origin in the EU.

a thorough analysis by the German Federal Justice Ministry showed that 84 per cent of the legislation in that country came from the EU.

This is a wonderful piece of nonsense and it is brought up time and time again by Eurosceptics. For a start, why was the German Justice Ministry interested in how many laws that affected Britain were made by the EU? Oh, so their figure was about Germany and is irrelevant? Thanks for the clarification, Mr Hannan. But J Clive Matthews explains it better at LiberalConspiracy:

This would suggest that something in the region of 10-20% would be a fair guess for the UK as well (a range that has the added benefit of being backed up by the British Chambers of Commerce’s recent study of regulations).

(the post at LC is well worth a read, by the way)

OK, so let’s just take a step into Hannan’s drea,land (shudder) and imagine that 84% of laws are made by the EU (so Westminster only makes 16% of our laws). If we withdrew from the EU would that mean that government would have to expand by eight times>/b> to take up the slack? Gosh, I thought that the Tories were in favour of shrinking the state, not increasing it!

Richard Blogger

10. Oh, and we’d be a democracy again.

Oh please, can I comment on this? I agree with Dan Hannan on this. The European Parliament uses the truely appalling D’Hondt electoral system. This is the party list system where citizens vote for a party and then get allocated a number of MEPs depending on the electoral support and the party decides who will represents you. As a voter you do not decide who your MEP will be. Horrible, isn’t it? The Irish (both North and South) have an opt out and use the Single Transferable Vote system.

So why am I mentioning this? Well Dan Hannan benefits from this horrible system. If he was truly concerned about democracy he would resign as an MEP and stand as a Westminster MP. But he doesn’t because he is scared.

Mark M

Your rebuttal on point 3 is a complete fail. Hannan says the costs of bureaucracy outweigh advantages of the single market (note, he acknowledges there are advantages to the single market), and you respond with a list of things the single market gives us. But you haven’t addressed the point that your list, plus other benefits, is still €180-600bn shy of the costs of the regulation.

4 – renegotiate the CAP from within? Ok great, and how’s that going so far? Why do europhiles always say “we’d be better renegotiating from within”. In case you haven’t noticed, we ARE within, and we CAN’T renegotiate. That is WHY people want out. If we COULD renegotiate, we WOULD.

5 – Do the fish know that Britain is in the EU? Would they swim away the instant we left? No, of course not. The fish stay where they are because there are nutrients to sustain them. They don’t suddenly move on because some country they don’t know about has left a union they don’t know about.

6 – if the number of laws coming from the EU is 84% of German laws, and 9.1% of UK laws then it implies that we introduce 9 times more ‘homegrown’ laws than Germany. Given our government’s record that the answer to any problem is a new law, this wouldn’t surprise me. Thus both figures could we be accurate.

7 – if the EU imposes tariffs on the UK then we can just trade with other countries. There’s a whole African continent just begging for someone to trade with them on a non-tariff basis. Inside the EU there are 26 countries we can trade tariff-free with – outside the EU there are hundreds. Also, as a net importer of EU goods one supposes that EU countries might want to give us special rates as the standard tariffs could mean a huge loss of trade for those remaining 26.

8 – again, this strange idea that somehow Britain has a major say in how EU market laws are shaped. Norway essentially gets a best of both – benefits of the single market without the single state politics.

9 – free marketeer v socialist argument – rebuttal has little to do with the EU and more to do with political disagreement

10 – You’re right – I sure did enjoy voting for Mr van Rompuy, Baroness Ashton and the rest of the European Commissioners. That was a good election.

http://ffffff Charles Barry

Just a few quick points.

Point #1 by Daniel Hannan (henceforth DH) shows no knowledge of how trade figures are constituted. Whilst Britain has been running a consistent trade deficit on its current account, it has been running a consistent surplus on its Capital and Financial accounts. What’s the difference? The Current account represents trade in goods and services, the capital account and financial account represent trade in financial transactions. All this shows is that Britain is better at Banking than Manufacturing.

Also, correlation without causation? Just because we joined the EU doesn’t mean to say it’s the cause of our trade deficit. Not that the trade deficit is a problem anyway.

Also 600 to 180 billion seems to be a substantially large margin of error.

Point #6 is silly. This figure was derived by calculating the ratio of German Laws to EU laws. Because there were 19,000 EU regulations passed in the period 1998-2004 compared to 3,500 German laws, this makes a ratio of roughly 85:15 EU to German laws. But you could just make more German laws and this would change the ratio. It doesn’t reflect the impact or importance of the German laws or EU laws.
Read: http://www.jcm.org.uk/blog/?p=2230

Point #7 assumes the UK government/British people want more liberal trade policies.

I don’t even see how Point #8 is a criticism of the EU. So Norway and Switzerland are different to the UK. You don’t need a degree in Politics to work that one out. Just look at a map.

Point #9 assumes that the UK, 60 million people – large and complex and diverse economy, can be turned into a version of the Cayman Islands (population 56,000).

Point #10 (in response to Mark M’s comment): I sure did enjoy voting for the Queen, and an unelected House of Lords. Oh, and an undemocratic system of appointing judges. And we still haven’t had a referendum on the magna carta.

Point 6. Talking of a sleight of hand, you’re doing one here. That report stated that 9 per cent of all statutory instruments originate in Brussels NOT 9 percent of laws. Obviously Statutory Instruments are not ALL laws, it for example ignores EU Regulations which are directly applicable.

No-one actually knows, reports in different counties give wildly different conclusions. I suspect Hannan’s figure is too high, but your ‘expose’ of 9% is equally misleading.

Besides, the percentage is irrelevant – until an EU Government can be voted in or out by me directly, then the percentage should be 0%.

What this entry highlights is that it is obviously crazy to talk (as is the norm in UK politics) about whether you are “pro” or “anti” the EU. It is this sort of simplistic debate that means are politicians can act without accountability in Brussels.